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The Swiss Bankers Association (SBA) has strongly criticised the extreme capital requirements for foreign shareholdings decided by the Council of States. A requirement to back 90 per cent of such holdings with hard core capital would entail disproportionately high costs and go far beyond international standards. The Council of States has also not followed the proposal put forward by its Committee on Economic Affairs and Taxation (EATC-S) to strengthen the internationally established AT1 instruments. As a result, these loss-absorbing instruments would not be taken into account when calculating capital requirements for foreign shareholdings. The consequences for the Swiss financial centre and the economy would be significant.